So far, since October 1, the debt has skyrocketed another $537.9 billion. And we’re not even halfway through the fiscal year yet.

Of course, the 2013 slowdown and subsequent explosion is entirely on account of the temporary standoffs between Congress and President Barack Obama over the debt ceiling last year.

As a result of legislative gridlock, the debt ceiling was not significantly raised for several months, and the growth of the national debt was briefly arrested. From Dec. 31, 2012 through Jan. 31, 2013 it held at about $16.4 trillion. And from May 31, 2013 all the way through the end of the government shutdown, it stood at about $16.7 trillion.

More than half of the increase in debt for fiscal year 2014 — some $328.2 billion — occurred on a single day: October 17, the day after the government shutdown ended.

Now the debt ceiling has been “suspended” — which is to say it is no longer in effect — until February 7.

By then, the debt will have increased by more than $1 trillion for the 2014 fiscal year, or at a greater than 6 percent increase.

That is much faster than even nominal economic growth as measured by the Bureau of Economic Analysis. So far, through three quarters, the economy has only grown a 2.97 percent before adjusting for inflation, or at a 3.96 percent rate annualized.

Meaning the debt-to-GDP ratio, at 99 percent as of September 30, will continue rising this year, and every year thereafter so long as the debt grows faster than the economy. We may not be able to grow our way out of this mess.

And we may not be able to inflate our way out of it either. Inflation only came in at 1.46 percent in 2013, and that includes food and energy.

In fact, since 1981, only twice has inflation outpaced the growth of the debt: in 2000 and 2001.

As a result, despite massive deficit-spending and now, even with $900 billion of quantitative easing each year by the Federal Reserve, inflation has remained subdued here — because we have exported it overseas.

As long as the debt keeps growing at a pace faster than nominal economic growth and inflation, our ability to repay it over time will by definition be diminished. Eventually, it will become so large as to be impossible to be refinanced, let alone be repaid, when we run out of willing and able lenders.

So let the salons pretend that we “owe it to ourselves.” Or that somehow, we possess some uncanny ability to repay it by inflating it away with printed money. In the end, none of that is going to work. Every day that goes by, the probability of default increases.

So far, since October 1, the debt has skyrocketed another $537.9 billion. And we’re not even halfway through the fiscal year yet.

Of course, the 2013 slowdown and subsequent explosion is entirely on account of the temporary standoffs between Congress and President Barack Obama over the debt ceiling last year.

As a result of legislative gridlock, the debt ceiling was not significantly raised for several months, and the growth of the national debt was briefly arrested. From Dec. 31, 2012 through Jan. 31, 2013 it held at about $16.4 trillion. And from May 31, 2013 all the way through the end of the government shutdown, it stood at about $16.7 trillion.

More than half of the increase in debt for fiscal year 2014 — some $328.2 billion — occurred on a single day: October 17, the day after the government shutdown ended.

Now the debt ceiling has been “suspended” — which is to say it is no longer in effect — until February 7.

By then, the debt will have increased by more than $1 trillion for the 2014 fiscal year, or at a greater than 6 percent increase.

That is much faster than even nominal economic growth as measured by the Bureau of Economic Analysis. So far, through three quarters, the economy has only grown a 2.97 percent before adjusting for inflation, or at a 3.96 percent rate annualized.

Meaning the debt-to-GDP ratio, at 99 percent as of September 30, will continue rising this year, and every year thereafter so long as the debt grows faster than the economy. We may not be able to grow our way out of this mess.

And we may not be able to inflate our way out of it either. Inflation only came in at 1.46 percent in 2013, and that includes food and energy.

In fact, since 1981, only twice has inflation outpaced the growth of the debt: in 2000 and 2001.

As a result, despite massive deficit-spending and now, even with $900 billion of quantitative easing each year by the Federal Reserve, inflation has remained subdued here — because we have exported it overseas.

As long as the debt keeps growing at a pace faster than nominal economic growth and inflation, our ability to repay it over time will by definition be diminished. Eventually, it will become so large as to be impossible to be refinanced, let alone be repaid, when we run out of willing and able lenders.

So let the salons pretend that we “owe it to ourselves.” Or that somehow, we possess some uncanny ability to repay it by inflating it away with printed money. In the end, none of that is going to work. Every day that goes by, the probability of default increases.

Robert Romano is the senior editor of Americans for Limited Government.

Jean

and yet government (Mochelle) wants us to loose fat by eating less. They can’t be consistent because its really about inflating their egos

GQ4U

“Eventually, it will become so large as to be impossible to be
refinanced, let alone be repaid, when we run out of willing and able
lenders.” Sounds very much like the recent housing collapse.

WhiteFalcon

The DOW tanked today by some 318 points or so. They said worries about slow world economy. What commieonazicrats don’t seem to realize is that the world needs a strong and vibrant US economy or eventually the whole thing, world wide, will tank. This is because all the world’s economies are very dependant on the US economy. What we and the world don’t need is the US having some moronic yahoo in charge here. Ovomit doesn’t have a clue. Even if he is successful in socializing our economy, all the world economies will fall, and it will be his fault. All socialistic economies of any size will fail, period. Ovomit and his band of morons just don’t get it. Hopefully we can get rid of most of the morons in the Congress in November. Ovomit will be around another two years.